WASHINGTON (AP) – A student loan cancellation programme for public workers has granted relief to more than one million Americans – up from just 7,000 who were approved before it was updated by the Biden administration two years ago.
United States (US) President Joe Biden announced the milestone on yesterday, saying his administration restored a promise to America’s teachers, firefighters, nurses and other public servants. He celebrated it even as his broader student loan plans remain halted by courts following legal challenges by Republican-led states.
“For too long, the government failed to live up to its commitments,” Biden said in a statement. “We vowed to fix that, and because of actions from our administration, now over one million public service workers have gotten the relief they are entitled to under the law”.
The Public Service Loan Forgiveness programme was created in 2007, promising college graduates that the remainder of their federal student loans would be zeroed out after 10 years working in government or nonprofit jobs. But starting in 2017, the vast majority of applicants were rejected because of complicated and little-known eligibility rules.
A 2018 report from the Government Accountability Office found that 99 per cent of applicants were denied, often because they weren’t in the right loan repayment plan or because their payments had temporarily been paused through deferment or forbearance – periods that weren’t counted toward the 10 years of public work.
The GAO faulted the Education Department for failing to make the rules clear.
The programme was the subject of legal and political battles, with Democrats in Congress calling on the Trump administration to loosen the rules and uphold the spirit of the programme. The education secretary at the time Betsy DeVos countered that she was faithfully following the rules passed by Congress. Declaring that the programme was “broken”. the Biden administration in 2021 offered a temporary waiver allowing borrowers to get credit for past periods of deferment or forbearance, among other changes. A year later, the Education Department updated the rules to expand eligibility more permanently.
Since then, waves of borrowers have been approved for cancellation as they reach the 10-year finish line. Yesterday 60,000 more hit the mark, pushing the total past one million.
When Biden took office, just 7,000 borrowers had been granted relief over the previous four years.
In all, the programme has erased USD74 billion in loans for public workers.
“I want to send a message to college students across America that pursuing a career in public service is not only a noble calling but a reliable pathway to becoming debt-free within a decade,” Education Secretary Miguel Cardona said in a statement.
After facing legal challenges to Biden’s own student loan plans, his administration has increasingly shifted attention to the record sums of loan cancellation granted through existing programmes.
In total, the administration says it has now canceled USD175 billion for about five million borrowers. Public Service Loan Forgiveness accounts for the largest share of that relief, while others have had their loans canceled through income-driven payment plans and through a 1994 rule offering relief to students who were cheated by their schools.
